RailResource.com | Dec 14, 2011 4:49PM EST
The Surface Transportation Board is launching a formal proceeding examining a dispute between the Union Pacific Railroad and chemical companies over the UP’s requirement that the shippers indemnify the railroad for possible hazardous material damages.
The STB announced the proceeding this week in response to a petition Union Pacific filed in April over a dispute with two shippers, Olin Corp. and SunBelt Clor Alkali Partnership.
The case has become the latest flashpoint in ongoing disputes between freight railroads and chemical shippers over the transport of hazardous materials. Railroads say they are not protected enough from the damages that may result in accidents involving dangerous goods that they are required to carry by regulation.
Several shipper groups opposed the UP petition for a proceeding, including the Fertilizer Institute, the Chlorine Institute and the American Chemistry Council.
The board said it would decide on the reasonableness of the railroad’s requirements that the shippers indemnify the carrier against future liabilities, other than those resulting from UP’s negligence or fault, when the railroad transports toxic by inhalation hazardous, or TIH, commodities.
Norfolk Southern filed a notice of intent to participate as well, and Canadian Pacific filed a statement in support of UP.
The shippers contend that the case “lacks a sufficiently active controversy to support the institution of a declaratory order proceeding” because no shipper has yet filed a complaint regarding the tariff provisions. But the board a proceeding could eliminate uncertainty, such as surrounds the reasonableness of UP’s tariff provisions.
The burden of proof on UP because it is the party seeking the declaratory order.